Making Tax Digital (MTD) will begin in April 2019 and will bring major change to the UK Tax System. These changes will apply to most businesses, landlords and the self-employed, along with some individual tax payers.
Tax management is drastically changing for the UK’s individuals and businesses.
At the moment, one single Tax Return is filed each year for Landlords, Sole-Trader, Partnerships and Limited Companies. VAT Registered Businesses are required to submit their VAT Returns each quarter.
Currently, when a VAT Return is submitted there are only 9 boxes that need completing (2 of these are calculations and 2 are not used for the majority of businesses).
With the introduction of MTD, businesses will no longer be able to keep manual records – digital records will need to be maintained using MTD compliant software (or spreadsheets)
Many businesses currently log in to HMRC Online to submit their VAT Returns – however, businesses must be using MTD Compliant Software as businesses will no longer be able to submit their VAT Returns using HMRC Online.
In summary;
Taxpayers will be required to send HM Revenue & Customs a summary of their income and expenditure at least 4 times a year.
Every individual and every business will have access to their very own personalised digital tax account.
Tax returns will be submitted digitally through MTD compliant software.
All business related transactions will be recorded digitally by using MTD complaint software or apps (or spreadsheets).
| VAT Registered Businesses with a turnover above £85,000 | VAT Periods starting on or after 01 APril 2019 |
| Voluntary VAT Registered Businesses (turnover below £85,000) | VAT Periods starting on or after 01 April 2020 |
| Other Trading Companies, Sole Traders, Partnerships and Landlords | After the successful roll out of MTD for VAT- start date not year confirmed (so April 2020 plus) |
So how do you get prepared for Making Tax Digital…?
Business and VAT transactions will need to be recorded digitally using MTD-Compliant Software. As a client of DMO Accountants, you can get access to fantastic online book keeping software for as long as you remain a client; with no additional monthly fee for the privilege. You can use this software to raise and send sales invoices and quotations, enter purchase information and bank transactions, scan in expense receipts and much more. In fact, you can scan anything of importance to us in an instance using an App, creating digital records from paper.
Our aim as an accountancy firm will be to assist you in making the online record keeping process effective, efficient and easier; helping you to save valuable time. Of course, we can still prepare everything for you as well should you not wish to record your purchases – just bring your receipts and invoices to us and we can keep your book keeping up to date!
This will also mean that as a client of DMO Accountants, you can view the financial performance of your business every quarter. Of course, we can also keep this information up to date monthly as well if you require us to do so!
Book a meeting with us today at our Wellingborough Offices to see how we can help!